The owner of Twitter's San Francisco headquarters has sued the social media company in San Francisco Superior Court alleging that it has failed to pay rent for the past two months.
SRI Nine Market Square LLC—an affiliate of major San Francisco commercial landlord Shorenstein Properties—alleges that Twitter did not pay rent for its property for December and January and is suing for breach of contract. Shorenstein, which bought 1355 Market St. in partnership with JPMorgan, declined to comment on the lawsuit.
Twitter currently occupies eight floors of the building at 1355 Market St. totaling around 462,000 square feet of rentable space. The office building was in the news in recent months after the company allegedly turned a portion of the space illegally into sleeping spaces.
Twitter failed to pay its monthly rent payment for December 2022, totaling $3.3 million, according to the suit. Shorenstein then served Twitter with a notice of default and drew $3.3 million from the company's letter of credit security deposit.
On Dec. 28, Shorenstein demanded that Twitter replenish its security deposit by $3.3 million within 30 days, which Twitter failed to do.
Twitter then allegedly breached the lease again by failing to pay rent its January rent, which totaled $3.43 million. Shorenstein drew $265,500 from Twitter's remaining security deposit and demanded that it be replenished. Twitter again failed to do so, according to the lawsuit.
Shorenstein contends that under the terms of the lease, Elon Musk's takeover meant that Twitter was required to increase its security deposit from $3.63 million to $10 million. The social media firm said the action was not required under the lease terms.
Shorenstein has not terminated Twitter's right to possession of the property, and the troubled company—which is facing numerous lawsuits stemming from Musk's chaotic $44 billion acquisition—continues to occupy the building.
The owner of 650 California St. in San Francisco has also sued Twitter for failing to pay rent.
Twitter, which was loaded with debt from Musk's purchase, faces a forthcoming $1.5 billion interest payment. Musk has initiated a drastic cost-cutting push that includes laying off thousands of staffers, eliminating data centers and auctioning off furniture and appliances from its Market Street headquarters.
Kevin Truong can be reached at email@example.com